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Sterling and UK stocks declined on Friday after the weak retail sales and PMI numbers from the UK. Data by the Office of National Statistics (ONS) showed that retail sales fell sharply in March as prices of most items rose. Sales fell by 1.4% in March while core sales fell by 1.1%. On a year-on-year basis, sales rose by 0.9% while core sales fell by 0.6%. Further data by Markit showed that PMIs declined in April, signaling that the economy is slowing substantially. Therefore, there are worries that the Bank of England will implement a strategic pause on rate hikes.
Global stocks declined sharply over concerns of higher interest rates in the United States. Bond yields rose to the highest level in years. In Europe, the DAX and CAC 40 indices dropped by 1.77% and 1.45%, respectively. In the UK, the FTSE 100 declined by 0.85%. Elsewhere, in the United States, futures tied to the Dow Jones fell by 100 points while the ten-year bond yields rose to 2.92%. Some of the worst performers in premarket trading are tech firms like Nvidia, Netflix, Amazon, and AMD. Some of the companies expected to publish their results today will be Coca-Cola, Verizon, American Express, and Crown Holdings.
Cryptocurrency prices crashed as their correlation with American stocks continued. Bitcoin dropped by more than 4% to about $40,000 while Ethereum is hovering around the $3,000 level. The total market cap of all digital currencies dropped to $1.8 trillion. Another reason why coins declined is the decision by Binance to block many Russian customers. The company will not allow Russian clients with over 10,000 euros to access its services. It attributed this to the new sanctions imposed by the European Union.
ETH/USD
The ETHUSD pair is hovering at about 3,000, which is slightly below this week’s high of 3,181. It has moved below the important support at 3,087. It has also formed what looks like a bearish flag pattern, which is usually a bearish sign. It dropped below the 25-day moving average, while the MACD has moved below the neutral level. Therefore, the pair will likely keep falling as bears target the key support at 2,885.
GBP/USD
The GBPUSD pair crashed to the lowest level since 2020. On the four-hour chart, the pair dropped below the important support level at 1.300. This price was along the lower side of the descending triangle pattern. It has also moved below the 25-day and 50-day moving averages while the Stochastic oscillator has moved to the oversold level. The momentum oscillator has dropped to the lowest level since last week. Therefore, the pair will likely keep falling.
EUR/USD
The EURUSD pair declined after the worrying EU manufacturing and services PMI data. It moved to a low of 1.0790, which was the lowest level since Wednesday. The shares have declined to between the middle and lower lines of the Bollinger Bands while the Stochastic oscillator has moved to the oversold level. Therefore, the pair will likely keep falling today.
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